I would recommend to go to
linux.org
and search for minimalist versions. e.g. DSL (
Damn Small Linux ) is well supported and will surelly run on your Hardware
Regarding your question about linux from scratch, I think the answer is obvious:It depends on your level of expertise.
In general terms being
1 the easiest way to install linux (buying a computer with linux installed and configured)
10 being the one that requires the most knowledge
Linux-from-scratch is definetivelly a 10. That does not mean that it's difficult if you know what you are doing, just that you need to know a lot.
If you want something that's really customized 'mid of the road': Flexibility to install just what you need + relatively easy to do, I would recomend ,
Gentoo . Be aware that you may want to create your gentoo image using a fast computer and then copy it on the slower one as it requires to do very heavy compilations (sometimes taking half day in a decent computer). ,
Gentoo requires patience. Make sure that you follow the documentation step by step.